How To Buy Amazon Stock (AMZN) – Forbes Advisor Canada Inc. (AMZN) has grown from a humble bookseller that Jeff Bezos started in his garage to the biggest e-commerce company on earth, complete with web services and advertising business verticals. AMZN has over 200 million Prime members worldwide, and it reported $ 150 billion ($ 117 billion USD) in revenue for the first quarter of 2022.

Since Amazon’s initial public offering in May 1997, when its share value clocked in at a measly $ 1.93 ($ 1.50 USD), it grew more than $ 3,221 ($ 2,500 USD) a share. Over the past three years alone, AMZN’s price has risen almost 100%. If those numbers have you eager to hitch your wagon to Jeff Bezos’ rocket, follow these steps:

How to Buy Amazon (AMZN) Stock

1. Open a Brokerage Account

To buy Amazon stock, you’ll need an online brokerage account. If you don’t have one already, check out our list of the best brokerages and best investment apps to jumpstart your search. Most brokerages these days allow for fee-free stock trading, but make sure to keep an eye out for any fees and account minimums.

You’ll also want to think about your goals for investing to figure out what kind of account you want.

If you’re aiming to save for retirement, choose a Registered Retirement Savings Plan (RRSP). If you keep your AMZN shares within this account, you will not have to pay any tax to either the IRS or CRA since the account is tax-deferred in Canada and is recognized by the IRS as tax-exempt.

Not all registered accounts have this designation in America, but there are limits with an RRSP. You will income tax in Canada on any money you take out of an RRSP and there’s a limit to how much you can contribute each year ($ 29,210 in 2022).

If you’re saving for a more general goal, like wealth building or a home down payment, you may simply want a taxable investment account that allows you to access your money at any time with no penalties.

2. Decide on an Investment Budget

Even Bezos doesn’t have an unlimited amount of money to pour into AMZN. Think through these questions to figure out how much to invest in Amazon.

  • What’s your budget? Make sure you have your bases covered before you start investing in Amazon. That means having enough to pay your bills, build an emergency fund and save for retirement. Once these are covered, allocate whatever’s left over to buying Amazon stock and other investments.
  • What’s AMZN’s price? Investing in Amazon stock is expensive: A single share cost well over $ 3,869 ($ 3,000 USD), in January 2022 and then the much more reasonable $ 138.97 ($ 107.67 USD) as of June of that same year. Still, if you don’t have that much upfront, make sure you pick a brokerage that enables you to buy fractional shares, or portions of individual stock. However, only two brokerages currently allow you to do this in Canada: WealthSimple and Interactive Brokers.
  • What’s your investing strategy? People generally invest one of two ways: With a lump sum purchase or in smaller, steady amounts over time. This latter method, called dollar cost averaging, may help you pay less per share on average over time. It puts your money to work and growing in the stock market as soon as possible, instead of forcing you to wait while you build up a specific sum.
  • What other investments do you have? Chances are AMZN isn’t going to be your only investment. So you’ll want to consider how it fits in with your other holdings and your plans. “The ideal investor [Amazon investor] is someone who is willing to think long-term, similar to the company’s management style, ”says Tom Forte, managing director and senior research analyst with DA Davidson and Company. “It’s someone who believes it will continue to find new business opportunities to maintain its long-term sales growth and premium valuation.”

3. Research Your Investment

Before you pull the trigger and buy Amazon stock, do some research to make sure you’re comfortable with the company’s direction and performance. As a publicly traded company, Amazon is required to file information about its finances with the US Securities and Exchange Commission (SEC). You can find these annual (10-K) and quarterly reports (10-Q) on Amazon’s investor relations page or by searching for Amazon on

In addition, you can complement these data points with expert analyzes, like you might find on Globe Investor, the Financial Post or Forbes, to determine if Amazon seems to be a financially sound company you want to invest your money in.

4. Place an Order

If you’re ready to buy Amazon stock, log into your online brokerage account or trading app. Then type in Amazon’s ticker symbol (AMZN) and the number of shares you want to buy or the amount of money you want to invest.

You may also have to pick what type of order you want to make. Two of the most common types are market orders and limit orders.

  • A market order buys or sells shares of a stock at its current price on the market.
  • A limit order only buys or sells shares if the stock reaches a specific price that you set.

Like many technology companies, Amazon is traded on the Nasdaq exchange, which has normal trading hours of 9:30 am through 4:00 pm ET, Monday through Friday. Your brokerage may provide access to additional pre- and after-market trading hours.

5. Keep In Mind Currency Conversion Fees and Taxes

If you are trading an American stock such as AMZN from Canada, your brokerage will take care of the paperwork, but you are going to have to pay currency conversion fees between 1% to 4% when you’re purchasing shares and then again when you sell them and are changing the proceeds from American dollars back into Canadian dollars. The currency conversion fee is on top of the exchange rate.

Thankfully, there are ways to avoid these fees by keeping your money for US stocks stashed in a US dollar bank account, so you never have to convert the currency, or by performing a maneuver called Norbert’s Gambit.

This so-called gambit is when you buy a stock or ETF that’s interlisted on American and Canadian stock exchanges. You buy Canadian shares of that stock or ETF, then you ask your brokerage to “journal over” your Canadian shares and turn them into American shares of the same stock, you then sell your American shares in US currency and can use the US dollars that result to purchase any American stock or ETF you want, like Amazon, without converting.

As for taxes, you will be subject to a 15% withholding tax if your US investment produces a dividend. You won’t be taxed by the IRS at all if your investment vehicle is inside an RRSP because this particular registered account is recognized by America, which isn’t the case for every registered account in Canada.

6. Regularly Review Your Investment’s Performance

Whether you invest in just one company or hundreds, it’s a good idea to review your investment’s performance on a regular schedule, whether that’s monthly, quarterly or annually. That way, you can see how your account is doing and evaluate whether you need to make any adjustments.

To judge how your Amazon investment is performing, you can compare its performance to those of benchmark indexes, like the Nasdaq 100 or S&P 500. You might also track the financial data provided in its public filings to gauge how Amazon handles its finances over time.

How to Sell Amazon Stock

Whether you want to use your money to make a major purchase or to invest in another company, there will come a time when you want to sell your shares of AMZN stock. To do so, simply enter your brokerage or investment app trading platform, type in the ticker symbol and select the amount you want to sell.

If you’ve earned substantial profits, it may be a good idea to meet with a tax professional, like a certified public accountant (CPA), to strategize ways to manage your potential taxes. In Canada, you will only owe capital gains on the growth of your investment on your Canadian income tax, as long as the company in question doesn’t have US real estate as their main asset and you don’t have a 5% stake in this corporation. Plus, with Canadian capital gains paid to the CRA, you will only pay 50% of the growth value of the investment.

The only other circumstance under which you would possibly owe tax is if you make $ 5 million USD on your US-based investments. In that case, you will owe estate tax to the IRS when you die.

How to Invest in Amazon with an Index Fund

Although investing in individual stocks can be appealing, investing in just one company can leave you vulnerable to potentially dramatic swings in prices. That’s why financial experts recommend most people invest in a diversified mix of index funds and exchange-traded funds (ETFs) that hold hundreds of companies’ stocks.

Luckily, AMZN is very easy to find in these funds: It usually represents about 7% of holdings in Nasdaq 100 funds and 3.5% of S&P 500 funds.

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